Posted by Chuck on January 8, 2018
Misc

Published on January 8th, 2018 | by Chuck

161

Chase Account Freeze due to Financial Review

[Update 4/20/18: added a fifth cause.] [Update 1/8/18: We’re hearing more and more people getting shut down recently. I also added a fourth cause of shutdown being large spikes in spend on existing cards. Lots of people are not having success getting reinstated. Reposting this as a warning.]

This is a guest post from my buddy Allen. He has some experience with getting Chase accounts frozen and released multiple times. I also added a few notes of my own and Final Thoughts at the end.

Remember Chuck’s recent post on Chase Cancelling All Accounts of Recent Card Applicants who they Deem Risky? Actually I believe the process they went through are Chase Financial Review (FR). We’re used to hearing about Amex FR, but apparently Chase recently introduced their own review process too.

Introducing CHASE Financial Review

My FR Story

I was newly approved for the Amazon Prime Rewards Visa Signature card in March and British Airways Credit card in April. In mid-May my cards were declined. When I contacted Chase on the number on the back of the credit cards, after some verification questions the representative stated she could not access my account due to “periodic review”. The representative stated it is not a fraud concern, but a periodic review of credit report and a specific team handles it.

After several more calls on both accounts and reaching out to the “periodic review” team, I was able to gather the following info.

What is Chase FR?

Sometimes an account goes through “periodic review”. You will not be able to use the account in question while it is under review. Think of the process Chase’s version of FR.

It’s important to realize that this is an individual credit card freeze. Unlike Amex, Chase doesn’t freeze your entire card portfolio. I can still use all my other Chase cards as normal except the ones under review.

You know you are under Chase FR when your card gets declined. When you contact front-level reps, they can’t access the account, or will tell you to wait maximum of 10 business days, or that someone will call you.

My significant-other also went through the same review process a few months ago on her Ink Business card. The new Ink Business card was declined and frozen for several days.

What Causes It?

The common indicators seem to be:

  • Brand new Chase accounts (regardless of how long you’ve been with Chase)
  • Lots of recent hard pulls
  • Suspicious usage of the new account such as large transactions or gift card purchases
  • Sudden large spike in spending (in the tens of thousands of dollars)
  • Perhaps high credit limits (with Chase, or maybe even with all banks?) (source)

Possible Outcomes

There are three possible outcomes of the FR:

  1. Shutdown: This is what got a bunch of people shutdown recently for people that had fairly short history with Chase. Note that this decision is potentially reversible. See Chase Cancelling All Accounts of Recent Card Applicants who they Deem Risky
  2. Clearance: After two weeks under review I was again able to use my accounts normally.
  3. Partial result: This isn’t common, but we’ve seen a report of slashed credit lines and reports of shut down which did not affect all business cards.

How to Deal with Chase FR

There isn’t really anything to do on your end during the review. In fact, if you happen not to use your credit card for a couple of weeks, you may never notice that you were ever reviewed. You can call the department directly at 1-800-290-1316, but they can’t help you until the review is actually finished.

The only indication of the FR in my case was that Chase hard-pulled me (Experian). They never told me they’d do it, I just found a pull on my credit report. My SO didn’t get any hard pull during her FR. [I suspect the hard pull does not come in most cases since they take information off the credit report that they’ve just recently pulled.]

If you do get shut down, you’ll get a letter from Chase indicating such. Before that, you won’t get any sort of communication.

Tips

  1. Do not go crazy with spending on new Chase accounts. My suggestion would be to wait at least wait until the initial 90 days has passed before MSing.
  2. Avoid obviously red flags such as gift card purchases if you can.
  3. The longer history you have with Chase, the better.

My FR Timeline

  • March 31 – approved for the Amazon card
  • April 27 – approved for BA card
  • May 12 – BA card got frozen (after giftcards.com purchase)
  • May 14 – Amazon card got frozen (after large Amazon gc transaction)
  • May 18 – Chase pulled my credit report
  • May 30 – both accounts were unfrozen on same day

Final Thoughts 

While many people have gotten shut down by Chase, it’s interesting to know that there’s actually an FR process during which time the accounts are frozen and reviewed.

The review process seems somewhat similar to the Amex FR process, except that Amex freezes all accounts and asks for your tax returns while Chase freezes specific accounts and might even hard pull. Also, Amex doesn’t usually shut you down while Chase does.

Importantly, the process seems to always start with one or more cards being frozen for review, eventually often resulting in all Chase cards being shut down.

As noted, many people are able to get their accounts reinstated upon request or official complaint. I wonder if some these cases never really got them reinstated, rather were naturally reopened after the review.

Please let us know if you’ve experienced a Chase FR as well.



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projectx
projectx

“The only indication of the FR in my case was that Chase hard-pulled me (Experian). They never told me they’d do it, I just found a pull on my credit report.”

I didn’t think a financial institution can legally perform a hard pull without your consent. Yes/no? In this case was it because they just took a closer look at your CR from the BA CC app? Your review came just three weeks after approval.

joE
joE

Once you have a relationship with them they can hard pull any time they want, it’s stated in their terms. They just choose to do a soft because for their typical marketing or basic review that is all they need.

Now if you don’t have a relationship with a bank and you did not consent/applied for anything, they can’t just to a hard pull for promotional purposes etc.

Jesse
Jesse

If I saw an unauthorized hard-pull, I’d just report it as fraud and have it removed.

Jr
Jr

Guess you’re wrong.

Alex
Alex

No way that is true.
They can softpull you at any time (if you are in relationship with them) but they can not hard pull.
BTW they can get all the same info from a soft pull as they do from hard. Point of a hard pull is to alert other lenders that you are asking for a loan.

Sam
Sam

“Point of a hard pull is to alert other lenders that you are asking for a loan,” correct, but that’s only because financial institutions agree that’s how it should work, that doesn’t mean that it’s REQUIRED to work that way.

Maria
Maria

“Once you have a relationship with them they can hard pull any time they want, it’s stated in their terms.” -joE
Completely wrong…and a hard pull without ypur explicit consent is illegal. Thankfully, you don’t write a blog to spread nonsense.

Jr
Jr

You’re wrong too.

Jr
Jr

Wrong too.

TYRONE
TYRONE

“Once you have a relationship with them they can hard pull any time they want, it’s stated in their terms. ”

No financial institution is allow to do a HP without your permission regardless your relationship with them. If it’s really stated in their terms then they are clearly violated the Fair Credit Reporting Act. They might be looking for a federal lawsuit.

Bob
Bob

Please provide proof that it’s illegal.

Mark Rex
Mark Rex

Ill search the act and regulations later if I can find time and post it. Even if they (Chase or anyone) has it in their terms and you agree that doesn’t override state or federal laws and regulations. It is clear though some a few minutes of searching that companies are only allow to request a hard pull of credit with your consent in connection to obtaining credit, employment, housing, security clearances, utilities and some others dealing with you possibly owing them money if things go south.

I am very busy but Ill try to find the wording for you. If someone beats to me to punch. I would file a dispute siting the code (Sec2b.2.1 or whatever) and futhermore asking for proof from the creditor that you applied for credit or authorized a HP. Most disputes over inquires can only done via mail and will serve you better anyhow as you have more room to explain it all and not tied down to explaining it a Twitter post (140 characters).

—-

For the Chase FR, do you have to send in tax documents like the Amex FR, or what exactly do you have to do?

Mark Rex
Mark Rex

I also meant to add to post this, I hope it goes below my first one. But if in fact it proves to be illegal you could take further actions like filing a complaint with the CFB or file a suit. I think a complaint would be enough to ensure it doesn’t happen to others. If there are others this is happening to then maybe a suit or class action suit could be called for. Then if Chase messes with you anymore because of you complaining and doing something about this it would just get worse for them.

Jan B
Jan B

OH, please. Let’s have a Class A lawsuit or better yet, follow a template for Wells Fargo and go for it. Long relationship with Chase and if i could qualify with the leastest (not a word) activity, I would join that for the few bucks it would return. I could hope for an interest rebate from them to cover interest from a prior mortgage or a prior credit card now closed.

OK, if anyone is of a zealot mindset, challenge Chase quickly so I can jump on the band wagon. Thanks and have a great day.

PS. My relationship with Chase is in good stead ’cause I don’t just use them as a MS tool over and over and think nothing errant will happen. I actually do business with them.

Jan B
Jan B

And, in my life sphere, MS is “minimum spend”. Clarifying for me as the MS acronym was also defined as something else in subsequent post. There are other eyes that read here.

BW
BW

MSR is minimum spend req.

Sam
Sam

These comments are ridiculously misinformed and are just “yeah, this is how I believe it works so it must work that way,”

I just looked at the Chase Freedom CC agreement and you do give them permission to “hard pull” your credit report: “We may obtain and review your credit history from credit reporting agencies and others. We may, from time to time, obtain employment and income data from third parties to assist us in the ongoing administration of your account. We may also provide information about you and your account to credit reporting agencies and others. We may provide information to credit reporting agencies about this account in the name of an authorized user. If you think we provided incorrect information, write to us and we will investigate.”

Before you go “robble robble that only says they can soft pull” that’s not the case. There’s no legal difference between “soft pull” vs “hard pull,” you won’t find those terms in the statues, the choice is on Chase to do on vs the other.

Source, read the law: https://www.gpo.gov/fdsys/pkg/STATUTE-123/pdf/STATUTE-123-Pg1734.pdf

Sexy_Kitten7
Sexy_Kitten7

Yes, JoE and Chuck are right. Banks can HP wo/consent if you have an existing relat. Of course, most banks don’t as a courtesy but you wouldn’t have a legal case to dispute IMO.

Here’s the relevant law 15 USC § 1681b “FCRA” (a)(1)(F)(ii)

“[A]ny consumer reporting agency may furnish a consumer report […] To a person which it has reason to believe […] has a legitimate business need for the information […] to review an account to determine whether the consumer continues to meet the terms of the account.”

https://www.law.cornell.edu/uscode/text/15/1681b

Mark Rex
Mark Rex

I see nowhere in this where it states they can do a hard pull because you have a relationship with them. Only that they can pull a report for account review which is a soft pull. Again, out of time but Ill look more into later. Thanks for the link.

Bob
Bob

The law doesn’t distinguish between a hard pull and a soft pull. If Chase does a hard pull, this law says its legal.

Sam
Sam

There’s no such thing as “hard pull” or “soft pull” in legal terms, these are industry terms, it’s merely how the industry agrees to operate. “Soft pull” is more of a courtesy because that’s just the way the industry agrees that makes the most sense.

This is the reason some banks do hard pulls and some soft pulls.

Curmudgeon
Curmudgeon

I usually “break in” my new Chase cards with large purchases – $5,000-10,000 as the first or second purchase and have never had an issue. I’ve had multiple Chase cards for several years and spend at least $50k/year on them, so maybe they are used to that type of spending from me.

Then again, my wife just got her first Chase card (Sapphire Reserve) and the first purchase was $9500 at a Simon mall and we had no issues.

BW
BW

BALLER!

Ryan
Ryan

Well if you’ve done that several times they probably consider it normal for you. What did you specifically purchase? Because it seems like this is intertwined with MS, not JUST large purchases.

I periodically spend very large amounts too ($3k-$5k) and I’ve never had an issue but they are always legitimate purchases.

scott
scott

I find the pattern of spend interesting: get approved for BA card and then made a giftcards.com purchase. Five weeks after getting Amazon card made a large Amazon giftcard purchase. I think the key is not to MS on Chase cards. I stopped doing this about a year ago.

Mo
Mo

But there are, like, a billion people who MS Chase all the time. I believe its more due to the new accounts, combined with sudden large purchases. And, this whole thing may be due to a recent influx of people defaulting on their credit.

scott
scott

Many people have slowed down on MS’ing with Chase cards. I’ve read this on several blogs. Banks such as Amex and US Bank have already totally shut this method down. Chase has been creating stricter rules and looking into unusual spending more. I used to get a new Chase card and immediately put thousands of MS on them with no issues. Now we’re hearing about financial reviews and shutdowns. Chase just has too many good cards to mess with them these days.

WayUpNorth49
WayUpNorth49

Amex has NOT “totally shut down MS”, even for min spend. Simon is officially gone for meeting min spend, but that’s it. (Yes, Amex has threatening language, but that doesn’t mean that they come remotely close fully enforcing it.) One can still MS spg cards for points at Simon, for example, and one meet min spend at your favorite grocery stores.

I’m not saying that they don’t care about MS, but MS is still certainly possible with AMEX.

Jim
Jim

A “billion people”? How many people do you personally know who do it? How many readers does this site/other blogs/Reddit have who not only know what it is, but actually do it? It’s not even close to 7 figures.

I’d guess MS is a very, very small fraction of the transactions Chase sees from its users.

ihg newbie
ihg newbie

i plan to buy $200 to 300 amazon GC from staples using ink cash every month for my own consumption. would this raise a red flag?

joE
joE

that’s small potatoes, I wouldn’t worry about it. Plenty of people that max out their $50k easily, so relax and enjoy the card.

The Value Traveler
The Value Traveler

yeah those are those red small round potatoes for steaks 🙂 Its people that flip that credit line 2-5x in a MONTH…even after going over the 50K limit for INK.

VL
VL

The comment not related to MS… just something to bring your attention to

With such small amounts of GC purchases you do not get much cashback even at 5% rate, but you loose a lot by not using your card for your purchases directly. You do not get any purchase protection, price matching or extended warranty benefits, which are very common on premium cards.

I personally got to use extra year of warranty on a couple of occasions.

If you do not care about it – it is totally up to you, but just FYI.

TJ
TJ

When we purchase GCs, I assume most are converting to MO and paying back card off or depositing into account, therefore still using CC for everyday spending as well. That’s what I do at least

VL
VL

I was replying on @ihg newbie comment, where it was stated that the gift cards are purchased for the personal use on Amazon. Obviously, if you are buying food on Amazon fresh – no worries, but if you are buying a TV, then I would definitely use a card with extended warranty & purchase protection….

DSP
DSP

“regardless of how long you’ve been with Chase”

So how long has this guy had other Chase accounts and what were they? What were the typical spend patterns on the other Chase accounts? What was the timeline leading up to the Amazon card approval? I find it highly unlikely that Chase would do as described for a veteran customer with other accounts with similar spend patterns.

Also, please disclose the amount of the purchases and what the CLs are. These are critical details that are not included and make this DP worthless IMO.

Jimbo
Jimbo

Agree. Please deine “large” – without doing that, this is a useless description. What’s “large”?

dave
dave

Other critical details were his activities with other card issuers…how many new cards, how much spend, credit utilization etc.

Darv
Darv

Any new card is going to get a little “crazy” spending since, uh, we need to hit that minimum spend target. There’s no easing into it, as perhaps would be the perfect world. There’s only 90 days or maybe 115 with Chase.

Thanks for the fresh info DoC.

With both my wife and I, I’ve been trying to keep cards paid down to zero before statements cut so any soft pulls done by any issuers won’t reveal anything they might perceive as “crazy.” We don’t manufacture spend, but Plastiq is our best friend. We “checking spending power” on any large purchases with new Amex cards and calling into Chase to tell them about imminent large purchases, they note the accounts.

Hopefully this strategy keeps us in the clear. I wouldn’t mind going through a FR so much, although prefer to avoid, but I certainly don’t want my wife to go through that.

I’ve also read that Barclay does soft pulls and can close accounts or significantly reduce CLs, and we’re into them too, so main thing for us is keeping statement balances close to zero across all cards.

Guy Bucktastik
Guy Bucktastik

Barclays just sent me a letter. They raised my credit limit on my commence mc from 12500 to 13000.

I asked for a credit limit last December and was denied with a hard pull.

Darv
Darv

People say Barclay is quirky. I’ve never had any unusual interactions with them or atypical things happen with my accounts or requests. But yours is one of those quirky datapoints-:)

Gene
Gene

What happens to your UR points balance if your account is shut down?

Miles Hustler
Miles Hustler

About how much were spent on the Amazon and giftcards.com purchase?

Allen
Allen

Hey all. I was the original author of this article. I don’t want too into too specific of detail in case Chase tries to track me down. I started my banking relationship with Chase since 2011. I have 9 personal cards and 2 business cards with them.

For Amazon it was after >90% credit limit utilization on the first statement, approx 40k spent then I got the freeze.
For BA it was <50% credit limit utilization, before first statement even closed and less than 10k giftcards.com spend.

I've done similar pattern on BA on my partner's card before in 2015, nothing happened. I believe this is a fairly recent development after 5/24 to catch churners.

HarryTheFirstHandle
HarryTheFirstHandle

Wow, that is huge even by the standards on this site. Anyway I think some kind of review is required for such spend in such short time even for your own security – though I would think they should notify before freezing. Thanks for the article and the heads up though I am never going to reach anywhere close to those numbers.

Eric
Eric

What did you buy on Amazon that added up to $40K?

Guy Bucktastik
Guy Bucktastik

Flux capacitor

NinjaX
NinjaX

make sure you check thats its not a fake from china. i heard a lot of counterfeit flux capacitors send you to the ice age and you cant come back resulting in permanent ICEsolation.

PG
PG

That’s why I only buy merican: https://www.oreillyauto.com/flux-capacitor

MoreSun
MoreSun

ROFL!!

Bob
Bob

HAHAHA! You had over 90% utilization in your FIRST month, $40k spend on a card with less than a $44k limit, and you wonder why Chase froze your account?

Blue
Blue
BW
BW

What does ‘busting out’ mean exactly? Just opening as many cards as possible, maxing them out and then disappearing to another country or filing bankruptcy?

Ann
Ann

Read the link. It says what they’re mainly trying to catch is “synthetic” identities (people that never really existed) being used for that. So there’s nobody who needs to file bankruptcy or flee the country, just a criminal who abandons that fake identity with a pile of debt and starts another one.

cm
cm

So, this doesn’t sound like any sort of an actual review, then, does it?

More like a 2 or 3-week suspension to see if anything else that’s abnormal will come up?

B
B

How does this differ when compared to just Chase “closing” the accounts. Is it possible to have the same department review closed accounts? I’ve filed a CPFB complaint for them closing my accounts without any explanation. The only thing I was given is Chase no longer wants me as a client, although my business (Ink Plus) card remains open.

Kate
Kate

What happens to your ultimate reward points when you get shutdown by Chase? I was thinking of applying for Chase Ink maybe next month (Jul) but I am now scared of losing my existing points.

Here are the most recent cards I got in the last 24 months:
Nov 2015: AA Biz
Apr 2016: AMEX Biz Gold
Oct 2016: CSR
Jan 2017: CSP
4/18/2017 : AMEX blue for Biz
4/26/2017: AMEX rewards Gold

So I had 3 personal cards and 3 biz card in the last 24 months…probably more than an average person but fewer than an avid churner…if you can provide any insight on whether it may put me at risk for review/account closure it would be greatly appreciated. I guess if the 3 biz cards doesn’t show up in their review I would be fine.

James B.
James B.

Chase is more generous than other banks like US Bank or Amex. After an account freeze, Chase will give you 30 days to unload your URs. US Bank will permanantly forfeit all your Flex Rewards. Amex will freeze your MRs and possibly forfeit them afterwards.

William Charles

Thanks for the post, Allen. I enjoyed reading it and it’s always good to get discussion and data points started and shared!

JLa
JLa

Ummm…. what is “MSing”?

William Charles

Manufactured spending, basically buying cash equivalents and turning them back into cash.

JLa
JLa

Oh, I see. Thanks.

Avi
Avi

New CSP frozen today and gone under financial review. Happened after tried buying 2k AGC and the order didn’t go through. Had spend ~$100 in three days before attempting to buy AGC.

AL
AL

Gutsy! I do hope it works out for you. At the very least it will be a good DP. Personally, I would season my card a little longer before 2k of GC.

James B.
James B.

In the future, try to gradually increase spending on you credit card accounts. When banks see a sudden increase in spending the fraud dept. automatically reviews the transactions and financial reviews are more likely.

So the key to successful MS is to gradually increase spending.

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